Action taken on HMDA

Posted By: laf0915

Action taken on HMDA - 05/18/17 07:14 PM

Application to refinance home loan. Preliminary underwriting done, appraisal received and title commitment requested. When the title company was performing the title search, they found some issues with the legal description that need to be corrected by the surveyor. The amount of time to get this done was unknown. In speaking with the applicants about this, they decided to withdraw the application and get the issues corrected and reapply at a later date. I am not exactly sure how to report for HMDA. Is it file closed for incompleteness - approved not accepted?
Posted By: Dan Persfull

Re: Action taken on HMDA - 05/18/17 08:40 PM

Action Taken

Conditional approvals---customary loan-commitment or loan-closing conditions. The commentary indicates that an institution reports a "denial" if an institution approves a loan subject to underwriting conditions (other than customary loan-commitment or loan-closing conditions) and the applicant does not meet them. See comment 4(a)(8)-4. What are customary loan-commitment or loan-closing conditions?

Answer: Customary loan-commitment or loan-closing conditions include clear-title requirements, acceptable property survey, acceptable title insurance binder, clear termite inspection, and, where the applicant plans to use the proceeds from the sale of one home to purchase another, a settlement statement showing adequate proceeds from the sale. See comments 2(b)-3 and 4(a)(8)-4. An applicant's failure to meet one of those conditions, or an analogous condition, causes the application to be coded "approved but not accepted." Customary loan-commitment and loan-closing conditions do not include (1) conditions that constitute a counter-offer, such as a demand for a higher down-payment; (2) underwriting conditions concerning the borrower's creditworthiness, including satisfactory debt-to-income and loan-to-value ratios; or (3) verification or confirmation, in whatever form the lender ordinarily requires, that the borrower meets underwriting conditions concerning borrower creditworthiness.